The unveiling of next school year’s University of Minnesota budget doubled as a celebration for a long-awaited undergraduate tuition freeze, mixed with a shot of concern about other costs creeping up.

Touted as a first in at least a generation, the freeze for undergraduate residents fulfills a promise by university leaders and a demand by state legislators. Along with a widely praised new investment in promising research, the freeze now is enshrined in President Eric Kaler’s $3.6 billion proposed budget.

The budget doesn’t deliver universal good news, though: Graduate students and out-of-state undergraduates will chip in more for tuition and all students will pay higher fees.

The proposal represents an almost 2 percent jump in spending over the biennium, including $2 million more in merit scholarships and a 2.5 percent merit-based pay increase for faculty and staff.

Kaler presented his budget to the Board of Regents on Wednesday before the board hosted a public forum on the proposal.

Regents cheered the undergraduate tuition freeze and a $10 million trim to administrative costs. Several worried about the added costs that will hit some students; they urged the university to plan ahead for the aftermath of the two-year freeze.

“Like any good budget, this is a compromise,” regent John Frobenius said, “and there are some Catch-22s in this budget I am concerned about.”

The Board of Regents will vote on the budget at its meeting next week.

University leaders congratulated themselves on the first state aid increase in six years, a 7.1 percent boost over two years. They credited a new approach under Kaler: The school didn’t just ask for the money but also spelled out how it would spend it, including the tuition freeze and the MnDRIVE initiative to support research.

Kaler estimated the $17.8 million toward MnDRIVE will translate into 50 new faculty positions and 70 graduate students, working in areas from food preservation to robotics: “The return on investment on these dollars will be enormous.”

For local undergraduates and residents of states such as Wisconsin that have reciprocity agreements with Minnesota, tuition will remain flat at $12,060 a year.

They will see some fee increases, including a $93 uptick in student services fee and $312 more in room and board, now at $8,000 a year. The room and board hike still keeps the university near the bottom among Big 10 institutions, Kaler noted.

For other out-of-state undergraduates, tuition will go up $1,000 a year, to $18,310, on the Twin Cities and Duluth campuses. The move comes several years after the university set out to boost out-of-state enrollment by keeping tuition for nonresidents low.

Graduate students will see increases in their tuition — about 3 percent for most, but as much as 9 percent for resident first-year law students, who will pay $38,000 in tuition alone. The university said overall graduate tuition increases are the lowest in years.

“Frankly, there’s less political enthusiasm around the cost of graduate education,” Kaler said, reminding regents the Legislature did not grant the U its entire aid request.

The budget also reflects $10 million in administrative cost reductions, such as the elimination of some director and assistant dean positions. Legislators tied a fraction of the U’s funding to a $15 million reduction goal, which officials said they would meet later this year.

Meanwhile, the university will boost spending in areas that Kaler said more directly touch learning and research, such as new faculty hires in veterinary medicine, business and pharmacy.

Regents praised the budget and urged Kaler to continue his push to run a leaner university. They singled out the law school and other graduate cost increases as well as some fee hikes as causes for concern.

Regent Laura Brod said she remains worried about affordability for middle-class students, whose families make too little to readily foot the college bill but too much to qualify for financial aid.

And, she said, “I worry about the spending increases (in the budget) and how they could eat up the tuition freeze.”

Participants in the public forum echoed some of these concerns and more. Some student leaders and members of the U’s clerical union argued the university can still do more to rein in administrative costs.

Student Chris Getowicz brought up a symbolic referendum calling for a 10 percent pay cut for about 160 administrators making $200,000 or more, which students passed overwhelmingly this spring.

“It’s time to stop chopping from the bottom and start chopping from the top,” said Caitlyn Boley, a member of the union.

Aaron Beek, president of the Council of Graduate Students, said these students face growing financial pressures, including assistantship stipends that have not kept pace with inflation and rising workloads.

“We fear the budget will balance on our backs,” he said.

Other speakers applauded the tuition freeze and the new research investments. Jerrold Vitek, chair of neurology, spoke of promising work to combat incurable degenerative diseases such as Alzheimer’s and Parkinson’s: “This budget supports people who do life-changing research.”

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